GmbH & Co. KG : chapter 16

• DOI: 10.10520/EJC74079
• Pages: 213-215
• Published date: 01 January 2008
• Author: Christoph Jaehne
• Date: 01 January 2008

213

CHAPTER 16

GMBH & CO. KG

16.1 Introduction

One cannot describe the legal form of a GmbH without men tioning the

GmbH & Co. KG. Thus, it is necessary to at least brief‌ly discuss this

type of company, and introduce the main features of this widely used

combination between the GmbH and a commercial partnership.1

16.2 Main features

This unique legal form of a combination between a ‘Kapitalgesellschaft’

and a commercial partnership owes its exis tence to aspects of tax

law and company law. The aim is to combine liability limitations of a

GmbH and tax benef‌its of a part nership with the subsequent found-

ing of a ‘Komman dit gesellschaft’.2

Generally, the GmbH is used as the ‘Kapitalgesell schaft’, however,

sometimes the AG can be found also in this function.3

The KG is one of the two principal forms of commercial partnerships,

the other one being the OHG.4 Even though commercial partnerships

are not legal entities separate from their partners, they have the legal

ability to own assets and incur liabilities. Although internal regula tions

can change this, the GmbH as the ‘Komplementär’5 via its managing

director(s), manages and represents the GmbH & Co. KG.

A creditor can choose between suing the partnership or the partners,

which are jointly and severally liable for the partner ship’s liabilities.

1 With regard to the various other forms of a GmbH, see Sud hoff (1992),

64 et seqq. GmbH & Co. KG is a limited partnership (KG) with a limi ted

liability company (GmbH) as general (personally liable) partner. As men-

tioned in the discussion which resulted in the so-called small reform of

1981, i.a., also a company on deposits (‘Handels gesellschaft auf Einla-

gen’) was suggested as an alternative to the GmbH & Co. KG. However,

it was unsuccessful; Arbeitskreis GmbH (ed.), Die Han dels gesellschaft

auf Einlagen — eine Alter native zur GmbH & Co. KG (1971).

2 As previously mentioned, abbr. KG, limited partnership.

3 Yet in small numbers, with regard to this entity, see Beck mann, Die AG

& Co. KG (1992).

4 As previously mentioned, OHG = ‘Offene Handels gesell schaft’, unli-

mited/general partnership.

5 General partner. A ‘Komplementär’ is a partner of a KG or KGaA with

full personal liability for the liabilities of the partnership. With regard

to a foreign ‘Kapitalgesellschaft’ acting as ‘Komplementär’, see BayO-

bLG, 1986, NJW 3029 dealing with a private limited company of British

origin. See also Brooks, “The status of foreign juristic persons in South

Africa”, 1986, MB 91 et seqq.